When you’re playing golf and your tee shot comes just a wee bit short of the putting surface but you manage to get it (up) onto the surface and then (down) into the hole on the next shot, you’ve still made par and accomplished what’s known as an “up-and-down.”
Diesel prices have an up-and-down game all the time but it seems like the par keeps changing.
After three weeks of “downs,” diesel has headed up for the third straight week, with the national average today ringing up at $2.582 a gallon, up 2.6 cents from the $2.556 a gallon truckers were paying last week.
That puts California diesel near the $3-a-gallon mark at $2.935 a gallon, the highest in the nation, followed by West Coast prices at $2.862, according to the Energy Information Administration (EIA) of the U.S. Energy Department.
And once again, the Gulf Coast hit a hole-in-one with the lowest price in the nation at $2.446 a gallon, up 3.2 cents from last week’s $2.414.
Where will diesel prices go from here? Into the weeds, the water, the sand or the hole?
That depends on crude oil, which is having an “up-and-down” game of its own.
For the present at least, new U.S. air strikes in Syria have sent oil prices climbing, which analysts said will help U.S.’ ally, Saudi Arabia, “both economically and geopolitically.” That also has sent diesel and gasoline prices up.
Since the beginning of April, the global oil market had tightened after production cuts established this past December between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries.
But not all of OPEC’s countries, like Iraq, are obeying the production cuts. The oil bloc’s second-largest oil exporter, Iraq recently announced plans to significantly increase its oil output and started drastically increasing its production early last month, threatening to send oil prices plummeting once again.
This has likely caused great concern in Saudi Arabia, OPEC’s largest and most powerful exporter. The production cuts that the Saudis continue to follow have only exacerbated the major economic fallout that low oil prices have caused, according to analysts.
Saudis aren’t happy to be taking on the lion’s share of the production cuts and reportedly are thinking about re-pricing their oil bound for Europe, upsetting Russia’s apple cart and threatening the OPEC production cut.
For more information on diesel prices by region click here.